Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Problem 8-6A Part 2 2. Prepare journal entries to record depreciation of the machine at December 31. Answer is not complete. No Date General Journal Debit Credit 1 Dec 31 Depreciation expense-Machinery Accumulated depreciation-Machinery Depreciation expense-Machinery Accumulated depreciation-Machinery 2 Dec 31
Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Problem 8-6A Part 2 2. Prepare journal entries to record depreciation of the machine at December 31. Answer is not complete. No Date General Journal Debit Credit 1 Dec 31 Depreciation expense-Machinery Accumulated depreciation-Machinery Depreciation expense-Machinery Accumulated depreciation-Machinery 2 Dec 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Required information
Problem 8-6A Disposal of plant assets LO C1, P1, P2
Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.
![Required information
Problem 8-6A Disposal of plant assets LO C1, P1, P2
[The following information applies to the questions displayed below.]
Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire
electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a
$28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is
disposed of.
Problem 8-6A Part 2
2. Prepare journal entries to record depreciation of the machine at December 31.
Answer is not complete.
No
Date
General Journal
Debit
Credit
Dec 31
Depreciation expense-Machinery
Accumulated depreciation-Machinery
Depreciation expense-Machinery
Accumulated depreciation-Machinery
2
Dec 31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6a02b260-ff6c-4d5e-84bc-57397ca3f648%2Fab7a7472-afc8-42e7-901f-73587fcde6ac%2Fqcx5tlh_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
Problem 8-6A Disposal of plant assets LO C1, P1, P2
[The following information applies to the questions displayed below.]
Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire
electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a
$28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is
disposed of.
Problem 8-6A Part 2
2. Prepare journal entries to record depreciation of the machine at December 31.
Answer is not complete.
No
Date
General Journal
Debit
Credit
Dec 31
Depreciation expense-Machinery
Accumulated depreciation-Machinery
Depreciation expense-Machinery
Accumulated depreciation-Machinery
2
Dec 31
Transcribed Image Text:3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $25,000 cash; (b) it is sold for
$100,000 cash; and (c) it is destroyed in a fire and the insurance company pays $35,500 cash to settle the loss claim.
Answer is not complete.
No
Date
General Journal
Debit
Credit
Dec 31
Cash
25,000
Loss on sale of machinery
Accumulated depreciation-Machinery
Machinery
2
Dec 31
Cash
100,000
Accumulated depreciation-Machinery
Machinery
Gain on sale of machinery
3
Dec 31
Cash
35,500 O
Accumulated depreciation-Machinery
Loss from fire
Machinery
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